Tuesday, May 8, 2018

The trade war between China and the United States

So
finally it had to happen, when push comes to shove, the United States already
promising to slap tariffs on Chinese goods imported to the U.S. finally
followed through with it and slapped tariffs. And China not ready to lose face
to its own citizens retaliated in kind although with much less products. But
since China exports more to the U.S. than the other way around, China will lose
more but this trade war is not going to be good for either side as the U.S. is
highly dependent on Chinese goods and their buying of the U.S. bonds and China
needs to be careful not to antagonize the U.S. too much as it is their largest
export market. Already the trade war is not even started in essence and the
stock market is acting like we are in a full blown war. It has been on a losing
streak a little bit here and a lot more there.

It is
just an unnecessary thing and it would do that much to correct the trade
balance between China and the U.S. Unless the U.S. consumes less of Chinese
goods and China exports less, there will always going to be trade imbalance.
But here is the classic economic dilemma that it all relates to supply and
demand, there is a demand for Chinese products and thus China exports its
surplus items to the U.S. where there is a demand. I believe that this back and
forth trade war will continue for some time and things will settle down once
the new normal starts to kick in.